Foreign Car Makers Build in America

With the announcement of a new automobile manufacturing plant in Alabama to be shared by Toyota and Mazda, foreign car companies are on track to build more vehicles in America than the Detroit Three. Adrienne Roberts and John D. Stoll report in the WSJ:

In the first quarter of 2018, foreign makers are expected to produce 1.4 million vehicles in the U.S., WardsAuto.com projects, equaling their American rivals for the first time. That’s a leap from the same period last year, when foreign companies trailed Detroit auto makers by more than 100,000 vehicles, or roughly 10%.

In coming years, General Motors Co. , Ford Motor Co. , and Fiat Chrysler Automobiles NV are likely see their dominance in vehicle production entirely evaporate as rivals such as Toyota and Mercedes-Benz boost their American workforces and add new factories.

Already, the Big 3 are being outsold by non-U.S. rivals, as their share of American sales dwindled to 44% in 2017.

A series of developments have fueled the shift. Japanese and other foreign companies—unencumbered by unions and decades of financial obligations to retired workers, and lured by U.S. states offering incentives—see an opportunity to bulk up their market share and localize production to mitigate risk. Meanwhile, executives at Ford, GM and Chrysler are prioritizing profits over revenue, scaling back production of low-margin compact cars and sedans in favor of pricier and profit-rich trucks and sport-utility vehicles.

Detroit makers, which once had considerable political sway because they employed the bulk of the nation’s auto workers, are losing influence at a time when state and national lawmakers consider legislation that will affect fuel economy, autonomous vehicles and the way cars have been bought and sold for a century.